The Honorable Patrick M. Wilson 

Ellis County and District Attorney 

109 South Jackson 

Waxahachie, Texas 75165 

Dear Mr. Wilson: 

KEN PAXTON 

ATTORNEY GENERAL OF TEXAS 

November 13, 2017 

Opinion No. KP-0171 

Re: Whether a Type A general-law 

municipality may collect dues on behalf of 

homeowners associatfons in exchange for 

partial payment of the municipality's 

accounting expenses (RQ-0163-KP) 

You ask whether a Type A general-law municipality may collect dues on behalf of 

homeowners associations ("HOAs") in exchange for partial payment of the municipality's 

accounting expenses. 1 The brief attached to your request states that the City of Ovilla (the "City") 

is a Type A general-law municipality. Brief at l; see also TEX. Loe. Gov'TCODE §§ 5.001, 6.001. 

The brief explains that pursuant to the City's agreements with two HO As, the City's monthly water 

utility bill to these HOA members includes a charge for their monthly HOA dues. Brief at 1-2. 

The City disburses the dues to the respective HO As, which in return pay the City for a portion of 

the City's accounting software maintenance and service costs. Id. at 2. According to the brief, the 

"accounting software was not needed for the collection and accounting of water utility bills; it was 

purchased exclusively for the purpose of accounting for the collection of HOA member dues." Id. 

at 1 n. l. The brief states that the City now questions whether it may lawfully continue to provide 

dues collection services to the HOAs. Id. at 2. 

We begin by considering the nature of HOA dues. As pertinent here, l:!:n HOA, also known 

as a property owners association, is an in.corporated or unincorporated association that 

(A) is designated as the representative of the owners of property in 

a residential subdivision; 

(B) has a membership primarily consisting of the owners of the 

property covered by the dedicatory instrument for the residential 

subdivision; and 

1

See Letter from Honorable Patrick M. Wilson, Ellis Cty. & Dist. Att'y, to Honorable Ken Paxton, Tex. Att'y 

. Gen. at I (May 22, 2017) and attached brief from Mr. Ron G. Macfarlane, Jr., on behalf of the City of Ovilla (May 17, 

2017), https://www.texasattorneygeneral.gov/opinion/requests-for-opinions-rqs ("Request Letter" and "Brief," 

respectively). 
The Honorable Patrick M. Wilson - Page 2 (KP-0171) 

(C) manages or regulates the residential subdivision for the benefit 

of the owners of property in the residential subdivision. 

TEX. PROP. CODE§ 209.002(7); see also id.§ 209.003(a)-(b) (stating that chapter 209 applies only 

to a residential subdivision subject to restrictions in a declaration making HQA membership 

mandatory and authorizing HOA assessments on property in the subdivision). An HOA's 

dedicatory instrument governs "the establishment, maintenance, and operation of a residential 

subdivision," and restrictive covenants in the dedicatory instrument obligate property owners to 

pay assessments to the HOA. Id. § 209.002(4). A regular assessment, including dues, must be 

"designated for use by the [HOA] for the benefit of the reside:p.tial subdivision as provided by" 

restrictive covenants in a dedicatory instrument filed in appropriate property records. Id. 

§ 209.002(8)-(11). An HOA may use a special assessment, including dues, for certain capital 

improvements in or maintenance and improvement of common areas, or "other purposes of the 

[HOA] as stated in its articles of incorporation or the dedicatory instrument for the residential 

subdivision." Id. § 209.002(12)(C). In sum, the obligation to pay HOA dues derives from a 

contractual relationship among private property owners and their representative, the HOA; the 

HOA must use dues only for the benefit of the private property owners. See generally Baywood 

Estates Prop. Owners Ass 'n, Inc. v. Caolo, 392 S.W.3d 776, 782-84 (Tex. App.-Tyler 2012, no 

pet.) (enforcement of HOA assessments through restrictive covenants); Harris Cty. Flood Control 

Dist. v. Glenbrook Patiohome Owners Ass 'n, 933 S.W.2d 570, 580 (Tex. App.-Houston [1st 

Dist.] 1996, writ denied) (stating that HOA covenants and restrictions are construed according to 

the same construction principles applicable to contracts); Boudreaux Civic Ass 'n v. Cox, 882 

S.W.2d 543, 547 (Tex. App.-Houston [1st Dist.] 1994, no writ) (stating that restrictive covenants 

for property owners to pay a subdivision's maintenance fee are "treated as contracts among the 

parties"). 

Next, we consider the authority of a general-law municipality such as the City. "Generallaw municipalities ... are political subdivisions created by the State and, as such, possess those 

powers and privileges that the State expressly confers upon them." Tex. Dep 't ofTransp. v. City 

of Sunset Valley, 146 S.W.3d 637, 645 (Tex. 2004); TEX. CONST. art. XI,§ 4. A statutory grant of 

authority includes implied powers, but only those "as are reasonably necessary to make effective 

the powers expressly granted. That is to say, such as are indispensable to the declared objects of 

the [municipalities] and the accomplishment of the purposes of [their] creation." Town of 

Lakewood Vil!. v. Bizios, 493 S.W.3d 527, 536 (Tex. 2016) (quotation marks omitted). Therefore, 

courts "strictly construe general-law municipal authority and [a]ny fair, reasonable, substantial 

doubt concerning the existence of power is resolved by the courts against the [municipality], and 

the power is denied." Id. (quotation marks omitted). 

Chapter 51 of the Local Government Code generally authorizes a governing body of a 

municipality to adopt an ordinance ''that: (1) is for the good government, peace, or order of the 

municipality or for the trade and commerce of the municipality; and (2) is necessary or proper for 

carrying out a power granted by law to the municipality or to an office or department of the 

municipality." TEX. Loe. Gov'T CODE§ 51.001. A Type A general-law municipality may adopt 

an ordinance "that is necessary for the government, interest, welfare, or good order of the 

municipality as a body politic." Id. § 51.012. However, no statute expressly grants a Type A 
The Honorable Patrick M. Wilson - Page 3 (KP-0171) 

general-law municipality authority to provide debt collection services to a private entity such as 

an HOA. 

According to the brief, the proponents of the billing practice argue "that collecting dues on 

behalf of the HOAs serves the welfare and good order of the municipality because the dues, once 

turned over to the HOAs, are used for the maintenance of property which, in tum, maintains and 

promotes property values in the City." Brief at 2. However, the City's statutory authority allows 

it to adopt ordinances only as "necessary for the government, interest, welfare, or good order of 

the municipality as a body politic." TEX. Loe. Gov'TCODE § 51.012 (emphasis added). From the 

materials you submitted, it appears that HOA dues are unrelated to the City's provision of utility 

services or any other municipal function or purpose, but instead are to be used for the direct benefit 

of individual property owners. See Brief at 1-2 & n. l; see also TEX. PROP. CODE § 209 .002(8) 

(defining "regular assessment" as a required payment to the HOA "that is designated for use by 

the [HOA] for the benefit of the residential subdivision"). A court would likely conclude that a 

Type A general-law municipality's authority to enact ordinances does not imply the authority to 

collect fees for an HOA, because such authority is not "indispensable" or "necessary for the 

government, interest, welfare, or good order of the municipality as a body politic." See TEX. Loe. 

Gov'T CODE§ 51.012; Bizios, 493 S.W.3d at 536.2 Therefore, a Type A general-law municipality 

does not possess the authority to collect dues on behalf of an HOA.3 

2In other circumstances, this office determined that the general powers of a limited-authority governmental 

entity do not impliedly authorize it to collect funds for other parties or for purposes unrelated to the entity's express 

powers. Cf Tex. Att'y Gen. Op. Nos. GA-0774 (20 I 0) at 4-5 (determining that school districts are not expressly or 

impliedly authorized to process payroll deductions for contributions to political committees); GA-0084 (2003) at 9-

10 (determining that a general-law city was not authorized to collect a fee included in a city's water bill to pay a 

volunteer firefighter association); JM-338 (1985) at 1-2 (determining that a fee included in a city utility bill for 

maintenance of the police department was an unauthorized tax). 

3Because we conclude that a Type A general-law municipality does not possess express or implied authority 

to collect HOA dues, we do not consider a related question, whether the use of municipal resources to directly benefit 

private interests constitutes an unconstitutional gift. See TEX. CONST. art. III, § 52(a); see also Tex. Att'y Gen. Op. 

No. KP-0035 (2015) at 3 (determining that article III, subsection 52(a) requires that a municipality utilize municipal 

resources "only to serve public purposes that are within the municipality's powers, not merely to benefit the public in 

general" (citing State ex rel. Grimes Cty. Taxpayers Ass'n v. Tex. Mun. Power Agency, 565 S.W.2d 258, 265 (Tex. 

Civ. App.-Houston [1st Dist.] 1978, writ dism'd)). 
The Honorable Patrick M. Wilson - Page 4 (KP-0171) 

SUMMARY 

A Type A general-law municipality does not possess the 

authority to collect dues on behalf of a homeowners association. 

JEFFREY C. MATEER 

First Assistant Attorney General 

BRANTLEY STARR 

Deputy First Assistant Attorney General 

VIRGINIA K. HOELSCHER 

Chair, Opinion Committee 

WILLIAM A. HILL 

Very truly yours, 

KEN PAXTON 

Attorney General of Texas 

Assistant Attorney General, Opinion Committee